MG ROVER'S accountants are being investigated by industry regulators following the collapse of the car maker.

MG ROVER'S accountants are being investigated by industry regulators following the collapse of the car maker.

The Accountancy Investigation and Discipline Board (AIDB) said it had decided to investigate the conduct of Deloitte as auditors and advisers to the Longbridge group.

The firm, which has an office in Birmingham, is one of the world's four biggest accountancy firms with 2004 revenues of £9 billion.

In 2002 MG Rover paid Deloitte £3.5 million in fees on top of a £500,000 audit fee.

The AIDB has the power to impose unlimited fines and issue reprimands.

It is thought the AIDB investigation will focus on the complex structure of the Phoenix Venture Holdings group, which included a large number of interlocking subsidiary companies most of which were ringfenced from the loss-making manufacturing operation.

The regulator is also expected to look at claims that before its collapse the company was told by its advisers that it was fit to continue trading.

Deloitte, which denies wrongdoing, said it was "disappointed" that yesterday's announcement did not mention the ICAEW's own investigation committee had not found a prima facie case against the firm.

"We will fully co-operate with the investigation; we are confident that we will demonstrate that our work was carried out to the highest professional standards," Deloitte said.

The AIDB investigation is separate to an inquiry launched in May by the Department of Trade and Industry into MG Rover's collapse.

The company went bust with debts of £1.4 billion. About 6,000 employees at Longbridge lost their jobs together with hundreds more at companies supplying components.